Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Indian Hotels Co Ltd (BOM:500850, Financial) reported a record performance for the 10th consecutive quarter, with a 28% revenue growth and a 270 basis points margin expansion year-over-year.
- The company achieved double-digit RevPAR growth across all its brands, with the iconic Taj brand delivering a 13% increase.
- The company is on track for another record year of portfolio growth, having signed 42 hotels and opened 14 hotels between April and October 2024.
- Management fees reached INR100 crores for the first time, indicating a 15% increase over the same period last year, driven by an 11% net unit growth of managed hotel rooms.
- New business verticals, including Ginger, Qmin, and ama Stays & Trails, delivered a 47% growth in consolidated revenue for Q2.
Negative Points
- The reported profit after tax was bolstered by an exceptional accounting gain, which may not be sustainable in the future.
- There is a concern about the impact of high base effects from events like the World Cup and G20 on future performance comparisons.
- The company faces challenges in maintaining high growth rates in management fees due to the initial start-up phase of many new hotels.
- Operational efficiencies may have reached an optimal level, limiting further significant improvements in this area.
- The Tree of Life brand, recently acquired, reported losses in a strong year, indicating potential management or operational challenges.
Q & A Highlights
Q: What is driving the strong performance in October, given the World Cup was in the base last year?
A: Ankur Dalwani, CFO, explained that despite the World Cup being in the base last year, the performance was strong due to robust demand. The outlook for November and December remains strong, with a busy wedding season expected to contribute positively.
Q: Can you provide insights on the increase in other expenses in Q2?
A: Ankur Dalwani, CFO, noted that the increase in other expenses is primarily due to the consolidation of TajSATS. However, as a percentage of revenue, expenses have decreased, indicating effective cost management.
Q: How is the pipeline affecting your CapEx plans?
A: Puneet Chhatwal, CEO, stated that there is no change in their capital-light growth strategy. The CapEx remains at 4% to 5% of revenue, with any additional investments funded through internal cash generation.
Q: What is the impact of the G20 and World Cup on your performance?
A: Puneet Chhatwal, CEO, emphasized that the fundamentals of demand and supply are favorable, and the company is showing double-digit growth even without these events. The focus remains on strong domestic and business travel demand.
Q: How do you see the management fees income growing in the future?
A: Puneet Chhatwal, CEO, highlighted that management fees have grown significantly and will continue to grow as more hotels stabilize. The focus is on both percentage growth and absolute income.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
